Total System Services Inc. announced a healthy increase in 1994 income but said some of its anticipated revenue for 1995 will not begin accruing until 1996.

The Columbus, Ga.-based credit card processor said it has had to amend a processing agreement with one of its biggest clients, Bank of America, because of delays in converting its accounts to the TS2 system.

"It is now expected that the completion of the conversions of Bank of America's credit card accounts previously scheduled for 1995 will be accomplished in 1996," Total System said in an earnings statement that showed a 14% increase in the fourth quarter, to $7.2 million, and 11% for all of 1994, to $22.5 million.

Revenues rose 31% to $53.8 million in the last three months, and 23% to $187.6 million for the year.

The company said Bank of America agreed in principle to amend what is to be a 10-year processing relationship. Total System will be making interim payments to the San Francisco bank but said they will not have a material effect on earnings.

Bank of America, which has six million credit card accounts, signed as a Total System customer last March. The BankAmerica Corp. unit's merchant business followed with a seven-year agreement in July, and by August the processor had completed the conversion of the bank's more than 80,000 merchant accounts.

The implementation of TS2 has been a longer ordeal.

The new-generation software, an entire remake of the company's cardholder system, has been the centerpiece of its business strategy and was crucial in attracting and keeping major customers like Bank of America. Announced in 1992 and costing more than $30 million to develop, TS2 was tested in 1993 and implemented last fall on the 750,000 accounts of First Omni Bank, Millsboro, Del.

Richard W. Ussery, chairman and chief executive officer of Total System, called 1994 a "pivotal year," in large part because of the progress of TS2.

The plan for 1995 included the system conversions of the company's three biggest clients - Bank of America, AT&T Universal Card Services, and NationsBank Corp. The B of A delay does not affect others, according to Total System vice chairman Kenneth E. Evans.

There was another good piece of contract news: First Tennessee Bank signed a letter of intent to use Total System for all credit, debit, and merchant processing needs. The processor already handles 160,000 of the Memphis bank's MasterCard and Visa accounts, and will add 590,000 credit and debit accounts as well as 40,000 merchant accounts.

Total System's merchant total as a result will go over 400,000. Cardholder accounts stand at about 45 million, from 114 issuing organizations.

The company ranks second among credit card processors to First Data Corp.'s Card Services Group, which serves more than 80 million accounts.

"Our agenda for 1995 again promises to be most challenging and will include a major dedication and concentration of resources toward the conversion of our major customers to TS2," Mr. Ussery said. The company "anticipates another year of record performance in 1995," he added.

While its revenue increases averaged about 23% over the last five years, reflecting overall card industry growth, they have not kept pace with the expense growth average of about 26%. TS2 and other system developments have been key factors.

Absolute revenue growth in 1994 did outpace expense growth, by $35.5 million to $33 million, and the totals stood at $187.6 million over $157.5 million. In percentage terms, revenues' 23% trailed expenses' 28%.

In the fourth quarter, while revenues were up 31%, expenses rose 38%, to $42.8 million.

Earnings on each of the 64.6 million Total System shares - 80.8% are owned by Synovus Financial Corp., a multibank holding company - rose four cents in 1994, to 35 cents, and one cent in the last quarter, to 11 cents.

The share price dropped 25 cents last Thursday, the day of the earnings announcement, to $17.125. It fell Friday to $16.75 and was up at $16.875 early Monday afternoon.

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